Question 1

What are the characteristic(s) of an efficient tax system?

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Question 2

Briefly describe some of the demographic trends that are predicted to increase the government's budget deficit.

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Question 3

Suppose a recent increase in federal gasoline taxes is estimated to cause a $150 million reduction in the total surplus (consumer plus producer surplus) in the gasoline market. If tax revenues increased by $100 million, what is the deadweight loss associated with the tax? As a result of the tax, 10,000 people sold their cars and started riding their bicycles to work. How much of the burden of the deadweight loss is incurred by the bicycle riders?

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Question 4

Briefly describe why taxes create deadweight loss.

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Question 5

Over the past century in the U.S., what has been federal government revenue as a percentage of GDP? What has been state and local government revenue as a percentage of GDP?

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Question 6

What has been the relationship over the past century between the U.S. economy's income and the percentage of that income that the government collects in revenues?

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Question 7

In 2011, what were the two largest sources of federal tax revenues, and what were the two largest expenses of the federal government?

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Question 8

What is the current, annual, approximate amount per person paid to the federal government in individual income taxes, social insurance taxes, corporate income taxes, and other taxes?

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Question 9

What are the three categories of the costs of taxes to taxpayers?

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Question 10

Use Table A to complete Table B.
TABLE A
   TABLE B

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TABLE...

Question 11

The United States federal government has a large budget deficit. Long-term projections suggest that under current law, taxes, as a percentage of GDP, will and government spending, as a percentage of GDP, will
__________.

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Question 12

Most people in the United States believe that our tax system should be both and .

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Question 13

"Income security" programs comprised 33 percent of the federal government's spending in 2011. Give a few examples of the programs included in this category.

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Question 14

What are the two main sources of tax revenues for state and local governments?

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Question 15

List the three most important expenditure programs of the federal government. How do they differ from the three most important expenditure programs of state and local governments? Explain why it makes more sense for the federal government to purchase "national defense" rather than state governments.

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Question 16

Of all the taxes collected in the U.S. economy, what percentage is collected by the federal government?

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Question 17

What are the two largest categories of federal tax receipts?

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Question 18

Define the deadweight loss of a tax.

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Question 19

The largest category of expenditures for state and local governments is .

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Question 20

As a person's or family's income rises, the marginal federal income tax rate .

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Quiz 12: The Design of the Tax System